Saudi Arabia Plans To Introduce 4-Tiered Tax On Sweetened Beverages & Here’s All About It

It wasn’t too long ago when Saudi Arabia announced its plans to introduce the sugar tax. Yes, as revealed by the Zakat, Tax and Customs Authority of the Kingdom, this will begin on January 1st, 2026. Arab News, in its report, mentions how the selective tax on sweetened beverages will be calculated on the basis of their total sugar content. As a result, it would replace the current flat 50% rate that is applied to the retail price.

Saudi Arabia To Introduce Tiered Tax On Sweetened Beverages

Under the new guidelines by the kingdom, the graduated tax brackets will be applied according to the sugar content per 100 millilitres of ready-to-drink beverages. As a result, this rule covers all forms of sweetened beverages – whether it’s in concentrated powder, ready-to-drink drinks, gels, or extracts that are intended for consumption. This change comes after the approval of amendments to the provision of the executive regulation of the Excise Goods Tax Law by the ZATCA’s board of directors, as revealed by the Gulf News.

Beverages Classified Into Four Tiers

With the aim of introducing a tiered tax structure, it classifies sweetened beverages into four brackets.

• In the first tier, there are drinks that are sweetened only by artificial sweeteners and contain no added sugar.
• The second year contains low sugar beverages that feature less than 5 g of sugar per 100 ML.
• In the medium sugar drinks, there is about 5 to 7.99 g per 100 ML.
• The fourth tier includes beverages with 8 g of sugar or more per 100 ml, and this is also classified as the highest tier!

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Comes Into Effect On January 1st, 2026

Wth the revised methodology in place, it applies to all forms of sweetened beverages. And with the linking of tax levels to sugar concentration, the system aims to incentivise producers and importers for offering beverages with lower sugar content.

This reform comes as GCC’s Financial and Economic Cooperation Committee adopt a volumetric, tiered excise tax system for sweet drinks across the region. Additionally, it also reflects the broader effort of the GCC nations to address health risks that are associated with high sugar intake.

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